Strategic CSR - Bill Nye

For those of you in the U.S. who grew up learning about science from Bill Nye, I have a couple of videos for you that reflect his (public) position on climate change. There is the optimistic Bill Nye, who has been contracted by Coca-Cola to sell the idea that we are just around the corner from a perfect solution to the problem of waste:

https://www.packworld.com/news/sustainability/article/22184886/bill-nye-the-science-guy-and-cocacola-teach-recycling

This video/ad was reviewed in the article in the url below, with the author denouncing the relationship as a pretty straightforward incidence of greenwashing:

"Bad news for everyone who loved watching Bill Nye the Science Guy during middle school science class: your fave is problematic. This week, Coca-Cola, one of the world's biggest plastic polluters, teamed up with TV's favorite scientist for a campaign to create a 'world without waste,' a joke of a corporate greenwashing campaign."

Needless to say, the assessment of the author is that Bill is, at best, presenting a highly selective element of a much more complicated issue:

"The video is, on the surface, an accurate depiction of the process of recycling a beverage bottle. The problem lies in what recycling can actually do. … Most of those plastics can only be reused once or twice before ending up in a landfill. Nye, for all his talk of science on TV, should know this. Over recycling's 60-year history, less than 10% of plastic that has been produced has ever been recycled. And while in theory, PET—the type of plastic that makes bottles—can be recycled more times than other types of plastic, that's not usually what happens. Virgin plastic is, simply put, cheaper to make into things like bottles than recycled plastic. Less than 30% of plastic bottles are recycled in the U.S., and a lot of that stock is turned not into other bottles, but 'downcycled' into other things, like filler and fabric. These products, in turn, can't be recycled again. The plastic ends up in landfills."

Then, there is the more attention-grabbing (and realistic) assessment of the situation in a short video Bill recorded as part of a John Oliver segment on climate change:

https://youtu.be/htqQRcNYkeY

I am guessing that the John Oliver video did not pay nearly as well as the Coca-Cola video, and I'll leave you to determine which one you think is the message we need to be sending from one of the most respected public voices on science.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

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Bill Nye, the Sellout Guy

By Molly Taft

April 7, 2022

Gizmodo

https://gizmodo.com/bill-nye-sells-out-shills-for-coca-cola-on-plastic-bot-1848763404

 

Strategic CSR - Tires

The article in the url below demonstrates to me how basic the current conversation is about environmental pollution, and the layers of complexity we are yet to even consider, let alone begin to tackle:

"The Tyre Collective does not yet have a name for its device. Hanson Cheng, one of the London-based startup's three co-founders, calls it a 'box.' Built to attach behind the wheel of a car, truck, van or bus, it's designed to capture emissions from an oft-overlooked source: tires. Every vehicle sheds tiny bits of its tires as it rolls, but 'where the rubber meets the road' is a bit of a misnomer: The tires on most passenger vehicles contain little natural rubber. Instead, they're made from a stew of petrochemicals, particles of which ultimately wind up in soil, air, waterways and oceans."

And, the amount of pollution tires create is not insignificant (see also Strategic CSR – Eco-activism):

"The International Union for Conservation of Nature pegs tires as the second leading source of microplastic pollution in oceans, and one 2017 study found a global per capita average of .81 kilograms in tire emissions per year, ranging from .23 kg per year in India to 4.7 kg (roughly 10 pounds) in the US. That may seem minor stacked up against the nearly 300 pounds in plastic waste the average American generates each year, but microplastics are tiny by definition — and an insidious source of toxins that researchers are only beginning to understand. 'When we talk about zero emissions, a lot of that conversation is about electric vehicles,' says Cheng, 30. 'But there's a whole world of non-exhaust emissions that also needs to be addressed.'"

We are like cats distracted by a laser pointer – we focus on one thing to the exclusion of other things, thinking we are making progress when we are really not even scratching the surface. The danger of this is that progress is too slow, but also that progress made on one dimension causes problems in other areas where we are paying less attention:

"Switching to electric cars helps to lower carbon emissions — even after accounting for manufacturing and charging batteries — but it actually exacerbates the problem of tire emissions. EVs typically weigh more and accelerate faster than their gas-burning counterparts, both of which add to tire wear. … 'Most of these EVs are big monstrous things, so it's perfectly intuitive that they will be chewing up tires faster,' says Nick Molden, founder and CEO of the UK-based research shop Emissions Analytics. Results from the company's latest road tests, [last year], show that under normal driving conditions a gas car sheds about 73 milligrams per kilometer from four new tires. A comparable EV, the company estimates, sheds an additional 15 milligrams per kilometer, or about 20% more."

The challenge of unforeseen consequences is enhanced when we develop any particular innovation in a vacuum, without investigating the potential ripple effects of the change:

"One landmark study makes the potential stakes clear. In 2020, researchers in Washington state solved a decades-old mystery of why storm runoff was causing mass deaths of coho salmon: 6PPD, a preservative commonly used in car tires. When exposed to sun and air, 6PPD transforms into a chemical called 6PPD-quinone, which turns out to be highly toxic to coho salmon — causing them to circle, gasp at the surface and then die within hours."

The goal for the Tyre Collective is to collect tire residue at the point of emission, by way of the device they have created:

"In the laboratory, Tyre Collective's device pulled in 60% of airborne emissions by mass, but real-world implementation is proving more challenging. The company is currently testing a prototype on a pair of delivery vans in London, where it's so far gathering around a fifth of emissions. The Tyre Collective's plan is to begin retrofitting the devices on delivery and bus fleets and, eventually, for EV manufacturers to integrate the technology into their cars — doing for tire emissions what the catalytic converter did for the tailpipe. Cartridges full of tire emissions could then be emptied at collection points as part of routine vehicle service and reused in new tires, soles of shoes and other products."

But that, in itself, is not a solution. That only happens when we encourage the collection of the waste, widespread adoption of the technology, and an ability to recycle what is collected:

"'There's a need to create a circular loop around this waste,' says Cheng. 'Otherwise, we're going to all this effort to capture it for it to be released back into landfills.'"

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

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When Driving, Tires Emit Pollution. And EVs Make the Problem Worse

By Ira Boudway

September 2, 2022

Bloomberg Green

https://www.bloomberg.com/news/articles/2022-09-02/new-tech-aims-to-capture-electric-car-tire-emissions

 

Strategic CSR - Big things

The article in the url below is a review of a book by Bent Flyvbjerg (academic) and Dan Gardner (journalist) about how big projects are conceived and implemented ("How Big Things Get Done"). The underlying point is that, given how inefficient and cumbersome the approval processes for such projects usually are, it is quite remarkable that anything big gets done. In reality, such projects are rarely done according to initial promises, or even done well, let alone exceed expectations. There are lots of obvious human-related reasons as to why this is true (e.g., psychological biases, challenges with sunk costs, general inertia, and so on), but the extent to which it is true is quite amazing:

"Mr Flyvbjerg is the compiler of a database of over 16,000 projects, which tells a grimly consistent tale of missed deadlines and shattered budgets. By his reckoning, only 8.5% of projects meet their initial estimates on cost and time, and a piddling 0.5% achieve what they set out to do on cost, time and benefits."

I wonder what the implications of this phenomenon are for challenges like combatting climate change and creating a sustainable economy, which are undoubtedly "big things."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

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Mega lowdown

By Bartleby

March 18, 2023

The Economist

Late Edition – Final

57

https://www.economist.com/business/2023/03/16/from-high-speed-rail-to-the-olympics-why-do-big-projects-go-wrong

 

Strategic CSR - Bureaucracy

The article in the url below examines how challenging it can be to build the energy infrastructure in the U.S. that is required to shift from fossil fuels to a renewable future. Of particular importance are transmission lines, so energy can be transported from those parts of the country where it is generated (often sparsely populated) to those parts of the country where it is needed (more densely populated):

"That means using the megawatts generated by Wyoming's winds to charge a Tesla in Los Angeles. But a bureaucratic thicket stands in the way. Both PacifiCorp [the biggest utility in the American West that operates a suite of wind farms in the county] and Mr Anschutz [a businessman who "wants to turn his Wyoming ranch into a sea of turbines"] have spent more than a decade trying to get high-voltage transmission lines that cross multiple states approved. TransWest Express, Anschutz Corporation's proposed line from Wyoming to the Nevada-California border, has yet to break ground."

The reason for the delay is the amount of regulation and compliance that characterizes this still-growing industry. Even though we have been saying we need to build this infrastructure for a long time now, the fact that we are still not close to realizing what is essential is extremely frustrating:

"But the process to get [clean energy projects] approved can be long, onerous and litigious. McKinsey, a consultancy, reckons it can take up to five years to get a permit for a solar farm and seven for an onshore wind farm. An ambitious timeline to build a high-voltage transmission line is at least ten years. … The Rhodium Group, a consultancy, estimates that [the Inflation Reduction Act has] the potential to cut emissions by 32-42% below 2005 levels by 2030. But a recent study … suggests that America would need to more than double its average pace of transmission expansion over the last decade to realise that goal."

And, this is not even considering technologies like "nuclear power and carbon capture" (which can achieve faster gains in emissions reductions more efficiently) that also exist in highly regulated industries that often generate local resistance:

"Legal challenges often revolve around threats to endangered species. In Wyoming, environmentalists worry that wind farms and transmission lines will harm sage-grouse habitat. Native American tribes sue to stop officials from approving energy projects on land sacred to them. A recent study … identified 53 big wind, solar and geothermal projects that were delayed or blocked between 2008 and 2021. A third of them faced permitting difficulties. [Environmental legal] challenges make up the largest proportion of federal climate-change litigation in America."

And, all the delays increase costs:

"PacifiCorp originally budgeted about $1.3bn for a transmission line from Wyoming to Utah. Some 15 years later, the cost has climbed to $1.9bn. For new nuclear plants, which are extremely capital-intensive, delay can mean death."

So, we face a choice – which "endangered species" are we willing to place under greater threat? If we don't move more quickly, it is hard not to conclude that the species under the greatest threat will be our own. We have delayed so long that it seems we have left it too late for the low-hanging fruit, and no longer have any easy choices left. As a result, we need to decide which of the least worst options is the most palatable. Whatever happens, we are going to be unlikely to please all of the people (and sage-grouse) all of the time.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

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Green v green

February 4, 2023

The Economist

Late Edition – Final

21-23

https://www.economist.com/united-states/2023/01/29/america-needs-a-new-environmentalism

 

Strategic CSR - Shein + Boohoo

Following on from Tuesday's newsletter, what evidence do we have that, given the opportunity, people will choose to do the right thing? The article in the first url below suggests, to the contrary, that they might not, and may even prefer not to. Specifically, the article profiles the company, Shein ("officially pronounced 'she-in,' though often pronounced 'sheen'"), which is described as a "Chinese fast-fashion company" and is becoming very popular in the U.S., its "most valuable market." Shein is becoming so popular that it "recently surpassed Amazon as the most downloaded shopping app in the United States." What consumers are attracted to is the shockingly low prices for most items ("things like $1 daisy earrings, $4 bucket hats, $12 cable-knit crop tops, $13 faux leather baguette bags and $29 neon PVC mule sandals"). What they are willing to ignore, it seems, is the ethical compromises that come with producing reasonable quality goods at those very low prices:

"… as Shein has grown, so have questions about its practices. Shein frequently makes headlines for its controversies, like selling a $2.50 swastika necklace or copying the work of designers. … Shein has also been accused of working with suppliers that violate labor laws, and failing to make necessary disclosures about factory conditions. … Last year, a CBC Marketplace investigation found elevated levels of lead in some Shein products, like a toddler's jacket and tiny purse."

As the article notes, fast fashion raises a number of issues that many consumers prefer to overlook:

"All of this has contributed to Shein becoming an archetype of a certain genre of supercheap clothing companies: It is the leader of a pack of Gen Z-favored brands, like Fashion Nova and Boohoo, accused by critics (including those from Gen Z) of contributing to overconsumption and waste. … Still, many of the videos on social platforms made about Shein … inspire comments raising these issues: How can a $4 top be made to last, so it doesn't end up in a landfill? How can the workers who sewed and shipped that garment be compensated fairly? Yet this hasn't deterred Shein's devotees, many of whom feel they haven't seen enough evidence to stop shopping with the brand."

In the article in the second url below, the influence of social media stars is explored in the context of the fast-fashion company, Boohoo. The article discusses how much influencers can increase sales, while at the same time encouraging the worst excesses of the fashion industry, even when "sustainability" is promised:

"Good news for people who like being lied to and wearing clothes that smell of petrochemicals: Boohoo, a UK-based online fast-fashion brand that has grown quickly in the US, has announced that they will be partnering with Kourtney Kardashian to embark on a 'sustainability journey.'"

The theory:

"The destination is unclear, but the 'journey'' will involve 46 limited-edition pieces of clothing made from 'recycled fibers, traceable cotton, recycled sequins and recycled polyester' as well as 'transparent practices for shoppers who want to learn more about the apparel.'"

And, the reality:

"It's unclear how sustainable any of the pieces in the upcoming collection – which ranges in price from $6 to $100 – actually are. The official press release includes absurdist statements such as '41/45 contain pieces that contain recycled fibres like recycles [sic] cotton' with no information about what percentage of the materials are recycled (Boohoo did not respond to repeated requests for clarification). Although the collection promises to be 'traceable,' only 2 items are made with cotton from CottonConnect, an agricultural project that promotes sustainable cotton farming practices with specific farms."

Ultimately, the underlying problem is that a small effort (even of questionable quality) often then excuses the rest of operations, which remain unhindered by even the promise of change:

"Even if Kardashian's range turns out to be as sustainable as Stella McCartney, her collection makes up less than 0.1% of the clothes available on Boohoo. Her endorsement, however, will help the whole company, including the 99.9% of their far less sustainable clothing."

And, the underlying challenge for the whole industry remains problematic:

"Anyone who says a company like Boohoo can create sustainable clothing is lying. Fast fashion retailers – from Shein and its lead-filled $1 sunglasses to Zara and their $50 polyester cardigans – are predicated on a system of always wanting more that is at odds with the environment."

As I have mentioned before (Strategic CSR – Jeans), sustainability, by definition, is the antithesis of fashion. Whenever the underlying goal is to get people to throw away what they have currently and replace it with something sustainable, there is a significant disconnect in coming to terms with the core problem.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Overlooking Ethical Concerns for a $7 Tube Top

By Jessica Testa

September 1, 2022

The New York Times

Late Edition – Final

D5

https://www.nytimes.com/2022/09/01/style/shein-clothing.html

Kourtney Kardashian wants to make Boohoo's fast-fashion sustainable. Spoiler alert: she can't

By Niloufar Haidari

September 12, 2022

The Guardian

https://www.theguardian.com/fashion/2022/sep/12/kourtney-kardashian-boohoo-fast-fashion-sustainable

Strategic CSR - Fast fashion

The article in the url below highlights that, even the fast fashion companies acknowledge their business model is a threat to their own future success:

"In its 2021 annual report, Swedish retailer Hennes & Mauritz AB identified one trend as a 'high' risk to its business for the first time, higher-risk even than increased energy costs or availability of raw materials. Should consumers increasingly prefer 'products and services with low climate impacts from trusted companies that are seen as leaders in sustainability,' H&M wrote, the company might see a negative impact. As recently as 2018, H&M didn't list sustainably-minded shopping as a risk at all."

The reason these companies are growing more wary, the article argues, is that there are plenty of signals that a backlash is possible:

"… the past few years have seen tough feedback for fashion companies that push the limits on how quickly they can churn out clothing and accessories. Retailers like Shein, H&M, Zara and Boohoo have been repeatedly dinged by consumers, activists, the press and public officials for their mounting climate, water, and plastic pollution footprints, for labor conditions and for greenwashing. Meanwhile, report after report shows consumers signaling more focus on the environment when it comes to purchasing decisions. In one 2021 survey, for example, two thirds of US consumers said they would pay more for sustainable products."

The only problem is that, any resource intensive industry characterized by waste (and that is as good a definition of fast fashion as anything else) is only a problem if the stakeholders of these companies (i.e., customers, employees, suppliers, etc.) think it is a problem. If, instead, these stakeholders are quite happy for these firms to continue polluting the environment at a heady rate, then nothing changes:

"Except, people don't always shop their values. And for all the talk about shifting shopping patterns, there is no clear quantitative evidence of any demographic ditching fast fashion en masse — not even environmentally conscious Gen Z. That leaves retailers whose business model relies on fast fashion to size up the threat against it in their annual reports, sustainability reports and climate disclosures, where little consensus exists."

Seen in this light, the conclusion of the article is damning:

"It's clear that shopping habits could change, but no one is sure how, when or if climate-conscious consumers will be good or bad for business."

So, there we have it – an industry that is a heavy polluter; widespread acknowledgement that this is happening and is not good; and the complete absence of change since, ultimately, the stakeholders of these companies don't (yet) care sufficiently to do anything about it. Fast fashion might be the perfect metaphor for our whole approach to the environment and climate change.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Where Is the Fast Fashion Backlash?

By Zahra Hirji

March 15, 2023

Bloomberg

https://www.bloomberg.com/news/features/2023-03-15/where-is-the-fast-fashion-backlash

 

Strategic CSR - Insurance

This chart from the article in the url below is interesting. It tracks insurance payouts over the past century for the insurance industry:

"When it comes to climate impacts, the frontline of the finance industry is insurance. Last year's payout from damages caused by extreme-weather events totaled $120 billion—about the same as the economic output of Kenya. And that's a 50% increase over the previous decade's average."

See if you can spot the moment when insurance claims went through the roof:

 

Apart from the obvious irony that "man-made" events are remaining steady, while "weather related" and "natural catastrophes" are increasing (even though climate change is "man-made"), the change since the late 1980s (and even more so, since 2000) is dramatic. In response, the insurance industry clearly needs to raise its premiums to discourage the kind of behavior (e.g., living in areas that are below sea level) that can lead to catastrophic payouts:

"'Our pricing signal should imply that you have to change your behavior,' said Christian Mumenthaler, group chief executive officer of Swiss Re. … 'But human beings generally don't like to change their behavior.'"

In addition to humans being irrational (who would have thought?), the government has a habit of stepping in when natural disasters occur, which further reduces the likelihood of prohibitive costs forcing changes in behavior. The result is that we get to keep repeating the same mistakes, only with the stakes getting higher as the consequences of climate change become more severe.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Climate is Forcing the Risk-Aware Industry to Reinvent Itself

By Akshat Rathi

January 24, 2023

Bloomberg

https://www.bloomberg.com/news/articles/2023-01-24/climate-is-forcing-the-most-risk-aware-industry-to-reinvent-itself

 

Strategic CSR - Natural capital

The article in the url below looks like an interesting experiment. It is a reaction against the idea of GDP as a meaningful measure of a country's economic output; in particular, because it does such a poor job of accounting for "the full economic costs of depleting America's natural assets":

"[Last summer] the White House unveiled a 15-year plan for an ambitious—albeit wonkish—environmental initiative. Its Office of Science and Technology Policy and a dozen other government agencies aim to develop natural-capital accounts that record changes in America's stock of natural resources, and quantify losses. Armed with new data, they plan to create a single statistic, alongside GDP, that rates how the country's resources are faring."

This project is starting immediately ("the first numbers are expected as early as [2023]") and will continue to evolve, with a deadline of 2036 for these measures to "become core statistics." The name for the new over-arching measure will be "Change in Natural Asset Wealth," and is quite the undertaking:

"Scientists must first measure ecological changes such as water pollution (typically tallied in parts per million for a specific pollutant), soil erosion (counting the amount of soil lost, say) and the degradation of wetlands (the area reduced). Economists must then attempt to determine prices."

The range of potential metrics seems endless, as suggested by the limited data currently being collected by the World Bank. Between 2010 and 2018, for example:

"… the value of forests and mangroves in America declined by 10%. That of ten minerals—among them copper and iron—dropped by 51%. Beekeepers have lost one-third of their colonies a year since 2006, according to Bee Informed Partnership, a non-profit group, and renewal rates fail to keep bee populations steady."

These assets are essential to the economic health of the nation (e.g., "Making electric vehicles and wind turbines would be impossible without copper"), but that does not mean assigning prices is easy. Current methods seem less than satisfactory:

"Some, like timber, are traded in cash markets, which allows researchers to set their worth as the dollar amount people pay for them. For more complicated [assets], like rivers or mountain ranges, economists survey people to gauge how much they are willing to spend to preserve them, or how far they will travel to access them."

Nevertheless, this is essential work that is already being pursued globally – e.g., the UN Environment Programme "now tracks broad measures of natural capital in 163 countries," and the article also notes that previous administrations in the U.S. attempted something similar, although political ideology with changes in administrations derailed those earlier efforts – shifts that have already proven costly:

"Eli Fenichel, an assistant director at the Office of Science and Technology Policy, who helps organize the initiative, believes that climate change would not have grown to the current crisis level had the cost of the carbon externality been tracked in official natural environmental-economic accounts early on."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

The Biden administration aims to quantify the costs of ecological decay

September 17, 2022

The Economist

Late Edition – Final

28-29

https://www.economist.com/united-states/2022/09/15/the-biden-administration-aims-to-quantify-the-costs-of-ecological-decay

 

Strategic CSR - Scope 4 emissions

The article in the url below caught my attention due to its focus on scope 4 greenhouse gas emissions – a term that the author saw used recently by PG&E. I was familiar with scope 1, 2, and 3, but had not heard scope 4 before:

"Scope 1 and 2 were rigorously defined back in 2001 under the Greenhouse Gas Protocol, the established resource for emissions accounting developed by the World Resources Institute and the World Business Council for Sustainable Development. Scope 3, the most complicated one, came in 2011. The trio of terms was designed to capture the full sweep of a company's climate footprint, according to WRI climate expert Pankaj Bhatia. This includes the direct emissions tied to a company's activities (Scope 1), as well as the indirect emissions from a company's energy use linked to making its product or delivering its services (Scope 2). It even includes pretty much any other indirect source of emissions associated with a company's value chain (Scope 3)."

So, is scope 4 a real thing or did PG&E make it up?

 

"Bhatia provided a decisive answer to the second question: No, officially they are not an established category under the Greenhouse Gas Protocol. And Bhatia would know because he's the program's director and has been tracking these conversations for decades. The fact that PG&E recently used this terminology was news to Bhatia and others interviewed for this article."

 

It seems that PG&E is using the term in order to convey positive progress, rather than simply cataloging all the negative emissions for which the firm is responsible: 

 

"PG&E doesn't dispute the term's unofficial nature. Spokesperson Lynsey Paulo wrote in an email that in the recent report, 'we acknowledge that 'Scope 4' is 'an emerging term for categorizing emission reductions enabled by a company' and present the term in quotations to distinguish it from Scope 1, 2, and 3 greenhouse gas emissions.' She went on: 'As a utility that provides gas and electric service to millions of Californians, we have dedicated programs and strategies to enable our customers to reduce their carbon footprint and our 'Scope 4' goals quantify our 2030 objectives.' For example, by providing energy efficiency and electrification programs, the company said they can help customers save 48 million metric tons of carbon-dioxide equivalent by 2030. And by promoting and supporting the uptake of electric vehicles in the utility's service area across California, the utility said it can save customers more than 58 million metric tons of CO₂ equivalent by the decade's end."

 

So, in essence:

 

"PG&E seems to be using 'Scope 4' as synonymous with what others more commonly refer to as 'avoided emissions,' said Laura Draucker, Ceres' director of corporate greenhouse gas emissions. This isn't the first time this has happened, but it's not common or widely accepted."

While this may be fine, due to the ambiguous nature of this term (which has not been officially defined) and the temptation firms have to emphasize positive over negative news, the potential is for 'scope 4 emissions' to be used as greenwash:

"To be sure, PG&E is tackling its greenhouse gas footprint. In the report, the company outlined its target to be a net-zero energy system in 2040, five years ahead of California's similar climate goal. The company has also pledged to cut its Scope 1 and 2 goals by 50 percent from 2015 levels by the end of the decade, and to cut Scope 3 emissions by 25 percent from 2015 levels in that same time period. Still, the report didn't offer a formula or detailed data behind PG&E's 'Scope 4' figures, making it hard to understand what's fully counted as avoided emissions or how to compare that to any other companies that may follow its lead. If companies do follow PG&E, Bhatia advises that they don't adopt the 'Scope 4' label and find something else instead."

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

PG&E Wants to Add 'Scope 4' Emissions to Your Climate Dictionary

By Zahara Hirji

June 19, 2022

Bloomberg Businessweek

https://www.bloomberg.com/news/articles/2022-06-20/what-are-scope-1-2-and-3-emissions-not-enough-for-utility-pg-e

 

Strategic CSR - DAOs

The idea featured in the article in the url below is interesting:

"There's a new shop coming to San Francisco's Hayes Valley, but it's not your traditional brick-and-mortar establishment. The DeStore 'STORE_0' will be collectively owned and operated by members of a so-called decentralized autonomous organization [DAO]. That is, anyone will be able to buy a blockchain-based crypto token that represents ownership in the store, and vote on what it buys and sells. The greater the value of the token, the greater the owner's voting power."

 

Specifically:

 

"Co-founder and CEO Itsuki Daito sees the store as a way to not only revive retail post-pandemic, but also to create a community space, where owners — half of whom will be locals and the other half from around the world — would have to agree on how to spend profits. While there may be a downside of having too many people in charge, one investor [reacts] that's just more 'wisdom of the crowd.' Will there be buy-in?"

This issue of 'buy-in' of course always applies to new ideas (and particularly new technologies). What I find fascinating, instead, is the underlying community-based structure to decision making and, in this particular case, engaged commitment to a for-profit organization:

"Daito's pitch goes like this: when the DeStore app is launched this fall, anyone will be able to buy a blockchain-based token that represents ownership in the store, and join the community's server on Discord, a chat app similar to Slack that includes many elements of more traditional social media platforms. The greater the value of the tokens participants own, the greater their share of voting power. As the store gets up and running, token holders will be able to vote on what brands to stock and sell at the location, what furniture to buy, and even who will work there. What happens to any revenue the store may generate will also be up to a vote."

Buy-in from the local part of that community, is clearly essential:

"A big test of this idea will be whether people actually want to spend their free time running a store in Hayes Valley, or have the expertise to do so successfully. Ideally, Daito says, 200 people will be part of the DAO. … Part-owners can choose to staff the store themselves, or hire outside employees, or even conscript Daito himself to operate the register."

The idea was partly motivated by those who predict the downfall of retail in the aftermath of the COVID-19 pandemic:

"Within the wreckage, Daito sees opportunity. 'During the pandemic, online shopping is getting bigger, of course. But offline shopping is getting bigger as well, if they provide offline-only value,' he said. 'Like a community experience; like a touch-and-feel experience.'"

What also makes the experiment interesting, though, is how the investors will chose to utilize any profits generated:

"Still, there's no clear return on investment from the store itself, given the fact that owners will have to agree on whether to divide up profits amongst the DAO or put the money back into new products. It's a gamble partners in a traditional LLC — or part-owners in a small business — make all the time, according to Parrott. In a DAO, there are just a lot more cooks in the kitchen. Or, as he puts it, more 'wisdom of the crowd' to go around."

Either way, what is clear is that the potential for blockchain technology is only just becoming apparent and will present opportunities to reshape the business world.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

This Entrepreneur is Betting the Future of Retail Runs on the Blockchain and Discord

By Sarah Holder

August 9, 2022

Bloomberg CityLab

https://www.bloomberg.com/news/articles/2022-08-09/this-retail-entrepreneur-is-betting-on-the-blockchain-daos-and-discord

 

Strategic CSR - Energy

This graphic caught my eye as I was scrolling through LinkedIn:

The thing that immediately caught my eye is the large number of states that still rely heavily on coal. This should give everyone reason to question whether EVs (and electrification, in general) are an immediate solution to our climate-related problems. The second thing, though, was how many states now have some form of renewable energy producing the largest amount of electricity. The same article produces a breakdown of each energy source for North America, as a whole:

Source of Power  Percentage

Natural Gas           44.32

Coal                       20.8

Nuclear                  8.83

Wind                      8.62

Hydro                    8.37

Solar                      3.46

Oil                         3.14

Other                     2.46

Have a good weekend

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

The Largest Source of Power in Every State and Province

By Alex

November 27, 2022

Vivid Maps

https://vividmaps.com/largest-source-of-power-in-every-state-and-province/

 

Strategic CSR - Global trade

Since the 2022 passing of the Inflation Reduction Act (which contains large subsidies for environmentally-related products and industries), I have seen a lot of media coverage about trade friction between the U.S and EU. The green subsidies that favor U.S. companies, by definition, penalize those companies from elsewhere and, given that the EU is perhaps the most advanced economic region in promoting environmental awareness, the companies most affected tend to be European. Before the IRA, however, there was the Green Deal, which was passed by the EU in 2020. A key part of this legislation was the Carbon Border Adjustment Mechanism (CBAM), which is an attempt to account for carbon emissions in products made in countries that don't otherwise tax that externality. The article in the first url below covers the details of CBAM, which were announced at the end of last year and represent the first attempt to tax imports based on the carbon emitted during their production (see Strategic CSR – Global carbon tax):

"The European Union reached an agreement to impose a tax on imports based on the greenhouse gases emitted to make them, inserting climate-change regulation for the first time into the rules of global trade. The deal … ends more than a year of negotiations on the details of the plan. The EU is expected to adopt it in the coming weeks as part of a sweeping package of legislation that would step up the bloc's efforts to limit global warming."

The EU is understandably proud of taking the first step on this issue:

"The plan, known as the carbon border adjustment mechanism, would be the world's first tax on the carbon content of imported goods. It has rattled supply chains around the globe and angered the EU's trading partners, particularly in the developing world where manufacturers tend to emit relatively large amounts of carbon dioxide. It has also unsettled manufacturers in the U.S. who are concerned the measure would create a new web of red tape to export to Europe."

The reason for this concern in the U.S., as noted in the article in the second url below, is that this legislation is as much about economic policy as it is about concerns for the environment:

"The 'carbon border adjustment mechanism' is aimed at protecting E.U. companies subjected to strict environmental rules from the risk of being crushed by competition with businesses from countries whose rules on emissions are looser. It is also designed to encourage other countries to adopt similarly ambitious emissions rules."

Thus, for all the criticism that the IRA has received for being a protectionist trade measure, the U.S. can legitimately point out that the EU started it. The exchange of blame raises one of the most frustrating aspects of tackling climate change, which is that every time a policy is proposed or (heaven forbid) implemented, the reason most often cited for why it can't possibly work is that it causes some disadvantage for some group that relies on the carbon emissions that the policy is trying to eradicate. But, of course, that harm is being inflicted because that is the main point. Since we are clearly incapable of surrendering our reliance on carbon voluntarily, some coercion is required, which will lead to a period of transition that is going to be challenging because it is new. If we want to decrease the consumption of carbon, we need to make it more expensive, which means that a higher price cannot be the reason for not doing it. Why we cannot have an honest discussion about this as a society is beyond me. Whenever a cost increase is a result of a policy change, those with less economic power (and/or a higher dependence) are going to be disproportionately affected since they have, by definition, less money. But, since economic theory of supply and demand is the best means we have devised of allocating scarce and valuable resources, there is no way around this. If we increase the cost of emitting carbon, then consumption will decrease, but those that rely on carbon or who resist reducing their consumption, will pay more. And, of course, the longer we take to acknowledge this, the higher the cost of switching becomes.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

EU to Tax Impots Based on Emissions

By Matthew Dalton

December 14, 2022

The Wall Street Journal

Late Edition – Final

A1, A8

https://www.wsj.com/articles/europe-reaches-deal-on-landmark-carbon-import-tax-11670921011

New E.U. Tax Hits Countries Failing to Halt Gas Emissions

By Emma Bubola

December 14, 2022

The New York Times

Late Edition – Final

A12

https://www.nytimes.com/2022/12/13/world/europe/eu-carbon-tax-law-imports.html

 

Strategic CSR - COVID-19

The article in the url below discusses the effects of the COVID lockdown on carbon emissions and documents, somewhat depressingly (although perhaps not surprisingly), how quickly they have rebounded. What I find fascinating about the pandemic, however, when essentially the whole developed world shut down, is how little impact there was on total emissions (see red circle, below):

For reference as to how relentless is the year-on-year increase in carbon emissions (despite all efforts to raise awareness of the dangers), see Strategic CSR – Climate inaction. During COVID, yes, total emissions dropped from 33.5 billion tons down to about 31.5 billion tons, but the world still produced 31.5 billion tons (more than almost all years since 1950) when a large percentage of the developed world was locked in their houses. When we all felt like there was nowhere we could go, total carbon emissions dropped by only about 6 percent. And, to be clear, we need to get it to zero. I think it is when you frame the problem in such stark terms that you realize we are simply not talking or thinking about the challenge from a realistic perspective. The analogy of rearranging the deck chairs on the Titanic comes to mind.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Covid-19 Slashed Carbon Emissions. Now They're Climbing Again

By David Hodari

April 20, 2021

The Wall Street Journal

https://www.wsj.com/articles/covid-19-slashed-carbon-emissions-now-theyre-climbing-again-11618894980

 

Strategic CSR - Danone

Around the turn of the year, I saw several articles claiming how 2023 was going to be the year of social justice litigation – that activists will increase their use of the courts to compel the behavior they are seeking from companies. The article in the url below gives some credence to those claims – this time taking advantage of a recently passed law in France:

"Danone, the French dairy giant, is being taken to court by three environmental groups who say it has failed to reduce its plastic footprint sufficiently, in a lawsuit challenging corporate social responsibility in the face of the climate crisis."

Specifically:

"The groups accuse Danone — one of the world's top 10 plastic polluters, according to a recent study — of 'failing to live up to its duties' under a groundbreaking French law that requires large companies to address their environmental impact and has opened ways to sue them should they fail to do so."

The more aggressive tactics are being driven by impatience with the pace of change and a sense that time is running out:

"By suing Danone, ClientEarth and the two other groups, Surfrider Europe and Zero Waste France, are hoping to shed light on what many scientists say is a global plastic crisis whose potentially devastating effects have yet to be fully understood. … In 2015, [plastics] were responsible for 4.5 percent of global greenhouse gas emissions, one recent study found, more than all of the world's airplanes combined."

And, as I have noted before in prior newsletters, this is not a small problem, while Danone is far from an innocent contributor:

"Figures from the Organization for Economic Cooperation and Development show that, over the past seven decades, plastics production has soared from two million metric tons (there are about 2,200 pounds per metric ton) to more than 400 million — and is expected to almost triple by 2060. Danone alone used more than 750,000 metric tons of plastic — about 74 times the weight of the Eiffel Tower — in water bottles , yogurt containers and other packaging in 2021, according to its 2021 financial report."

Danone, perhaps unsurprisingly, claims to be making meaningful progress on reducing the level of waste for which their products are responsible:

"The company said that it reduced its plastic consumption by 12 percent from 2018 to 2021, and that it has committed to use only reusable, recyclable or compostable plastic packaging by 2025. But Danone is not on track to reach that target, according to a report by the Ellen MacArthur Foundation, which set up a voluntary program with the United Nations for big companies to address plastic pollution."

Nevertheless:

"Only 9 percent of all plastics ever made have been recycled, according to the United Nations, with most of the rest ending up in landfills and dumps."

The law that the activists are using to sue was passed in France in 2017:

"It requires large companies to take effective measures to identify and prevent human rights violations and environmental damages throughout their chain of activity. Impetus for the law came from the Rana Plaza disaster in 2013, in which the collapse of a clothing factory killed more than 1,100 people in Bangladesh. Labels from famous brands were found in the rubble, casting a harsh light on the garment industry and prompting politicians and rights groups around the world to press for more corporate responsibility. The French duty of vigilance law, the first of its kind in Europe, has since inspired similar legislation in Germany and the Netherlands, as well as a proposed European Union directive."

I'll be keeping my eyes open to see if this tendency towards litigation is a trend that will pick up pace this year, and beyond. While this is a substantive way in which stakeholders can hold firms to account, there is also the danger that the interests of the minority are prioritized over those of the majority, who might not support the action being pursued in court.

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

Danone Sued Over Its Plastic Use Under a Landmark Law

By Constant Meheut and Catherine Porter

January 10, 2023

The New York Times

Late Edition – Final

B3

https://www.nytimes.com/2023/01/09/world/europe/danone-sued-plastic-use-france.html

 

Strategic CSR - BRCC

The article in the url below checks-in on a company I have been following reasonably closely – Black Rifle Coffee Company (BRCC; see Strategic CSR – BRCC). The article makes the case that, although they may not be your values, BRCC is clearly a values-based business:

"You might call Black Rifle Coffee Co. a socially conscious enterprise. 'This is a veterans' corporation,' founder and CEO Evan Hafer, a former Green Beret, says in a Zoom interview. More than half of Black Rifle's employees have served in the military or are family of veterans. In 2021 the company put $5.3 million in shares toward starting the BRCC Fund, a charity dedicated to helping wounded or traumatized veterans and their families. That was on top of $1.2 million in charitable contributions and $3 million worth of coffee and related products to active-duty military and first responders."

In spite of BRCC's commercial success (revenues of "$233.1 million" in 2021), the firm has faced difficulty identifying more legitimate partners with which it can work:

"But Mr. Hafer says Black Rifle struggled to find banks and law firms to help it arrange an initial public offering. Since he founded the company in 2014, companies have told him that it was 'too irreverent' and poses 'reputational risk.'"

The ostracizing (perceived or real) has continued in terms of financial institutions:

"In 2019 and 2020, a Black Rifle spokeswoman says, company leaders were talking to Chase, Bank of America and Macquarie Group about raising capital. After initially showing interest, all three companies declined to work with Black Rifle, citing the company's image. In 2018 Black Rifle had tried to open an account at a Chase branch in San Antonio and had been turned away over reputational concerns. The spokeswoman says that Macquarie was particularly fixated on the name of its in-house magazine, Coffee or Die, which covers military issues and won the Military Reporters & Editors Association's 2022 journalism contest for overseas coverage."

The story is the same with law firms:

"Black Rifle hit similar roadblocks in 2019 and 2020 with Skadden Arps, Latham & Watkins and Simpson Thacher & Bartlett. All three law firms passed on working with the coffee company because of its image. According to the Black Rifle spokeswoman, Latham & Watkins said that its reputational risk committee thought no one from top law schools would be willing to work at the firm if it took on Black Rifle as a client, especially because its name included the word 'rifle.' The name 'is an homage to the service rifle,' Mr. Hafer says. Like the guns he taught special-operations soldiers to shoot, he says, coffee is 'lifesaving equipment.'"

BRCC's founder and CEO, Hafer, extrapolates this exclusion to suggest it is indicative of the reaction all veterans face in seeking to engage with these normal elements of society. What I find interesting is that these banks and law firms would not doubt have no hesitation engaging with oil firms. So, why is it that a genuinely values-based business that is seeking to represent a population that society says it reveres (veterans) is excluded, when oil firms (which, by any measure have produced many times more harm than BRCC) are not shunned in the same way? The article suggests BRCC is being ostracized due to political correctness, but that seems less compelling if oil and gas firms are fine. Or, is perceived social and political 'harm' treated in a different way to environmental harm (which is much more damaging from a longer term perspective)?

Take care

David

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (6e)

© Sage Publications, 2023

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler6e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

A Socially Conscious but Politically Incorrect Company

By Megan Keller

September 16, 2022

The Wall Street Journal

Late Edition – Final

A15

https://www.wsj.com/articles/a-socially-conscious-but-politically-incorrect-company-black-rifle-coffee-initial-public-offering-finance-law-firms-reputational-risk-military-veterans-evan-hafer-11663258552